A Deficit of Ideas


  • July 1, 2019
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The period around the Lok Sabha elections was flush with commentary about India’s macroeconomic problems. However, an analysis of opinion articles published in the Indian Express over two months during that period reveals the narrow spectrum of debate over these issues, and the uncritical manner in which they are constantly repeated. Writes Kshitij Malhotra.

 

 

On May 30, an opinion piece titled “An Election of Trust” appeared in the Indian Express (IE). The author, Abhishek Lodha, begins the piece by congratulating Prime Minister Narendra Modi on his resounding victory in the Lok Sabha elections, and proceeds to make some suggestions on how to transform India from a “low-income to mid-income country” and “increase social cohesion and harmony”. The content of the article is largely unremarkable, except perhaps for eliciting a dull horror at the thought that there is a chance, however small, that Lodha sincerely believes his advice would help improve the lot of hundreds of millions of people. The only thing of note in Lodha’s article is a curious postscript which reads:

 

This writer’s views are biased — he grew up in an RSS (Rashtriya Swayamsevak Sangh) family and his grandfather and father are elected representatives of the BJP. His bias is compounded by the fact that he is managing director of one of India’s largest real estate companies. Before this job, he also worked for McKinsey & Co and was educated in the US — all of which make his views too right wing, capitalist and unrepresentative of real India.

 

Let us set aside the inexplicable decision by the IE editorial team to publish an opinion piece on its ‘Ideas’ page only to thoroughly discredit the views espoused in it by labeling them “unrepresentative of real India”. What interests us is whether this claim has any veracity and, on that point, it is hard to argue with the editors — most Indians do not belong to an RSS family, nor to a family with elected representatives associated with the ruling party. Most Indians do not inherit a real estate empire from their fathers, and most Indians certainly don’t get an education in the United States and have an opportunity to work with a global consultancy firm. It is quite reasonable, then, to conclude that Lodha has lived a life of extraordinary privilege, and his views, coloured by proximity to wealth and power, are at extreme odds with the lived experience of the majority of this country’s population.

 

A Cause for Caution?

 

Given that the IE’s judgement on Lodha’s background is correct, the question arises — what are these “unrepresentative views” he is advocating, which the editors are warning the readership of? The bulk of the article is concerned with five solutions to India’s economic woes, which would also, according to Lodha, help engender prosperity. His listed solutions are, very briefly, the following:

 

1.   We need to abandon the idea of a “command economy” (which he claims existed until 2014!) that “has not worked” and instead, we need to “trust our people and trust markets”.

 

2.   Wealth creation leads to happiness and hence, it is our national duty to “enable creation of wealth”. Further, “Wealth is good and job creators are the most important members of society,” he declares.

 

3.   We need to bring in a universal basic income to support the poorest members of our society.

 

4.   We need to cut interest rates drastically (he suggests a rate cut of 2 percent over the next year) to “enable India to become more prosperous by enabling consumption and investments”. Lowering of interest rates will lead to a reduction in interest costs on the government’s outstanding debt obligations, he adds.

 

5.   The Reserve Bank of India [RBI] needs to urgently infuse liquidity into the economy through quantitative easing in order to finance India’s capital needs “from its own balance sheet”.

 

For the sake of honesty, I admit that I have nothing but contempt for a billionaire “job creator” like Lodha. But I do feel an inclination to protest on his behalf on account of the unfair treatment meted out to him by the IE’s editors; not because they are wrong to describe his views as “unrepresentative of real India” but because his views largely align with other writers on economic matters that are published on the IE’s ‘Editorial’ and ‘Ideas’ pages without any cautionary postscript. A worthy “job creator” has been singled out and vilified, and we must investigate.

 

The Free Marketeers

 

Of course, no two people have the exact same views on all topics, economic or otherwise. So, what do we mean when we say that Lodha’s views align with other economic experts that write for IE? Perhaps an analogy will help illustrate the point. Suppose you want to produce a dangerous recreational drug, say methamphetamine. What do you do if you have no knowledge or previous experience of “cooking meth”? Well, you could get a bunch of ‘expert meth cooks’ in and you ask them how it’s done. It’s quite likely their methods will vary, as will the quality of the end product. But the end product will still be meth, which, regardless of how it’s made, is really, really bad for you.

 

In case it isn’t obvious already, the ‘cooks’ in the analogy are our economic experts (including Lodha) featured in the pages of the IE. And the end product, the meth, the thing they all have varying prescriptions for, is what can be called the ‘Third World neoliberal consensus’ — a set of policies dictated by the soulless suits at the International Monetary Fund (IMF) and the World Bank to Third World countries through structural adjustment programs, which have been the received wisdom in domestic economic affairs ever since 1991, when our own economy was, continuing with our analogy, shot full of meth.

 

In his paper Impoverishing a Continent: The World Bank and the IMF in Africa, writer AsadIsmi highlights the major features of the IMF-imposed ‘neoliberal consensus’ (page 9):

 

“contraction of money supply and fiscal austerity measures aimed at reducing excess demand in the domestic economy; demands for strict anti-inflationary monetary policy, privatization of public enterprises, trade liberalization and dismantling of foreign exchange controls; more flexible labour markets (in other words, a lowering of labour standards) and reducing the size of the public sector. This has meant cutbacks to education, health care and the social sector, and the elimination of subsidies and marketing boards for agricultural products as well as the privatization of such basic services as potable water, health care and education.”

 

Is Lodha alone in subscribing to the ‘neoliberal consensus’? Over a period of two months between April 1 and May 31 (immediately before, during and after the general elections), IE published twenty-four articles featuring commentary on macroeconomic issues on its ‘Editorial’ and ‘Ideas’ pages. Of these, twenty articles written by seventeen authors (economic experts, lawyers, and corporate big-dogs like Lodha) conform to the ‘neoliberal consensus’. The views of these authors, though not identical to Lodha’s, are shaped by the same ideology. Only three authors (economist Arun Kumar and activists Harsh Mander and Swami Agnivesh) express suspicion and disdain for this hegemonic ideology and its corporate beneficiaries.

 

Reading through the opinions of these free market warriors, it is immediately obvious that Lodha is hardly an outlier in any sense. Instead, his views are fairly mainstream within the ‘neoliberal consensus’. Considering Lodha’s five proposals individually, one can demonstrate this fact even if we limit ourselves to the twenty-four articles surveyed above. Take Amartya Lahiri, who shares Lodha’s disdain for government intervention in a “command economy,” and writes (The long game, May 24), “Lastly, withdrawing the public sector from its unproductive pursuits in multiple sectors, including banking, has to be prioritised.” Ashok Gulati (First, the low hanging fruit, May 27) pitches a pro-market model for agriculture, arguing for direct income support for farmers instead of higher Minimum Support Prices (MSP) for farm commodities which “has serious limitations because it bypasses the demand side of the equation”. Lowering interest rates to boost credit growth, and hence investment, along with creating a business-friendly environment for “job creators” is a policy prescription so widespread that it hardly warrants specific examples (although Neelkanth Mishra, in a column from April 17 titled No more half-measures warns that merely cutting interest rates is unlikely to revive growth). On the question of redistributive policies, Lodha is possibly a welfare dove (at least rhetorically) as he advocates for a universal basic income in his article. He is to be contrasted against Arvind Datar, who wrote that Congress’ NYAY scheme “will lead India inexorably to bankruptcy sooner than later” (More fiscal imprudence, April 4); or DevashishMitra, who frets about the cost of the NYAY scheme and calls for a lower cash transfer than the one offered in the scheme (A minimum framework, April 6). Finally, although none of the articles surveyed dealt with the issue of the RBI infusing liquidity into the economy, it appears that Lodha is on the same page as the committee headed by former RBI governor Bimal Jalan. This committee is likely to recommend that the RBI transfer excess capital to the government to stimulate economic growth. On that front too, Lodha’s views could not be more mainstream.

 

To be frank, one need not scour through two months’ worth of opinion pieces to prove that Lodha’s views are par for the course by IE’s standards. We need only look at the paper’s editorial from May 24 to find an almost identical, though more concise and less reverential, analogue of Lodha’s piece, and a near-perfect distillation of the ‘neoliberal consensus’. In “Agenda No 1,” the IE editorial board advises,

 

“The Modi-led NDA government’s economic agenda in its second term should be dominated by policy measures to boost private investment, a progressively cleaner GST regime with just two rates, a quick one-shot recapitalisation of PSU banks to ensure greater flow of credit and governance changes, tightening of the provisions in the new insolvency law to make sure that timelines are met, flexibility on labour laws to enhance competitiveness, privatisation of bleeding state-owned firms in competitive sectors and addressing of the crisis in the farm sector.”

 

Further, it wouldn’t be too controversial to state that all the experts committed to the ‘neoliberal consensus’, including the IE’s editorial board, have access to enormous wealth and privilege which, while it may not rival Lodha’s, far exceeds what an ordinary Indian possesses. Nearly all of the experts whose writings were sampled were either educated at or teach at elite universities, in India and abroad – Lahiri, for example, earned his PhD in Economics at the University of Maryland and has held teaching posts at the University of British Columbia and Johns Hopkins University, among others; meanwhile, Mitra completed his M. Phil and PhD in Economics from Columbia University and is currently a professor of Economics at Syracuse University. Those outside of academia are either involved directly with giant multinational corporations — as in the case of Mishra, who is co-head of Asia-Pacific strategy and India strategist for the investment bank Credit Suisse — or hold prestigious positions in think tanks such as the Indian Council for Research on International Economic Relations (ICRIER) where Gulati is Infosys Chair Professor for Agriculture. Among ICRIER’s prominent corporate donors, as listed in their Annual Report (2017-18, page 144), are Reliance Industries, Sterlite Industries (Vedanta Group), subsidiaries of the Tata Group, Ranbaxy, Bajaj Auto, Hindustan Lever, ITC, Infosys, DLF, Fortis Group, Essar Group, Citibank, Deutsche Bank, HDFC Bank, ICICI Bank, State Bank of India [SBI], Punjab National Bank [PNB], RBI, Kotak Mahindra Bank, the Ford Foundation and Kiran Mazumdar Shaw and Nandan Nilekani. Foreign contributions, between March 2018–March 2019, were sourced from tech-giant Qualcomm, the Bill and Melinda Gates Foundation and oil money from the Saudi Secretariat in Riyadh, among others. These myriad “benevolent” donors provided more than Rs. 11 crores in grants to ICRIER during the year 2017–18. (ICRIER is simply one prominent example among a great number of think tanks that help sway the opinion of the public and policy-makers in favour of their corporate donors.)

 

Negligence most foul

 

The point of this exercise was not to prove that the views of an overwhelming majority of IE’s opinion writers and its Editorial Board are as “unrepresentative of real India” as Lodha’s, by their own standards. Rather, the purpose was to illustrate the laughably narrow spectrum of debate in one of India’s most influential media outlets on issues of economics that have an effect on the lives of more than a billion people, most of them miserably poor. With stakes that high, to favour the views of highly privileged people trained at elite universities who receive their paycheck (directly or indirectly) from the coffers of the richest people in the world, and furthermore, to consider their ideas non-ideological and self-evident at the expense of alternative ideas, reeks of obscene negligence on the part of the editors.

 

The extent of negligence assumes criminal proportions when one realises that out of all the free market warriors sampled above, just one (who speaks of it only in passing) has anything to say about climate change, the biggest existential threat facing humanity. While doubling down on the economic system that is ravaging the planet, they also fail to comment on the rise of fascist leaders in India and abroad who have exploited the discontent engendered by capitalist crises and imbued their followers with rabid hate and bigotry. Instead, these largely cosmopolitan liberals willingly collaborate with the figureheads of parochial jingoism and majoritarian paranoia, precisely because it is good for business. After all, even ecological collapse and endless wars, though they may devastate billions, provide ample investment opportunities.

 

 

The author Kshitij Malhotra is a freelance reporter based in Delhi.

 

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